SBI share falls over 5% as brokerages cut price target post Q1 results

State Bank of India (SBI) share price declined over 5 per cent in intra-day trade, hitting nearly five-month low, on the Bombay Stock Exchange (BSE) today after brokerage firms cut their price targets for the stock following higher slippages in June quarter.

Weighed down by slashed price target, SBI share price declined as much as 5.33 per cent to touch an intra-day low of Rs 292 apiece on the BSE after making a bearish start at Rs 299.70. Paring some losses, SBI shares closed trade at Rs 300.25, down 2.66 per cent. The stock also saw a huge surge in volume trade with 16.21 lakh shares changing hands over the counter as compared to their two-week average trade volume of 11.08 lakh shares.

On the National Stock Exchange, SBI share ended at Rs 299.80 apiece, down 2.80 per cent as compared to previous closing price of Rs 308.45. The stock opened lower at Rs 298.45 and touched an intra-day low of Rs 291.70 during the day's trade.

In the last five trading sessions, SBI stock has fallen more than 15 per cent. The country's largest lender suffered an erosion of Rs 30,388 crore to reach Rs 2,75,279.64 crore in market valuation last week, the steepest hit among the most valued domestic companies.

Brokerages, such as CLSA, JM Financial, Citi and Jefferies, have cut their 12-month price target on SBI share due to higher slippages. However, most of them remained bullish and maintained buy rating on the stock.

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Global rating firm CLSA has maintained a buy call on the stock but slashed price target to Rs 380 from Rs 420 per share earlier. "Higher slippages disappointed, and Q1 net profit were below our expectations due to higher credit cost," it said.

JM Financial has also maintained buy rating on SBI stock with a revised target price of Rs 380 per share after SBI reported lower-than-expected profit, due to rise in provisions. "Slippages were elevated in 1QFY20, with corporate slippages contributing 33 per cent. As a result, specific credit costs were elevated at 2.3 per cent," it said.

In a separate development, State Bank of India informed the exchange that market regular Securities and Exchange Board of India (Sebi) has imposed a penalty of Rs 50 Lakh on bank for non-compliance with its directions related to reporting of frauds.

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On Friday, SBI had reported net profit of Rs 2,312 crore in the first quarter ended June 30, 2019, against net loss of Rs 4,875.85 crore in the corresponding quarter last year, on the back of better asset quality and decline in loan provisions. However, gross slippages of the bank rose sharply by 116 per cent quarter-on-quarter to Rs 16,212 crore.

Edited by Chitranjan Kumar